Sony Profits Surge in Latest Year

Published 8:00 pm, Wednesday, April 23, 2003

Hit movies such as "Spider-Man" and "Men in Black II," improved profits from video games and a weaker yen helped drive Sony Corp.'s profits sharply higher in the latest fiscal year.

But Sony chief executive Nobuyuki Idei warned the good fortune in films could not be expected to continue and shipments of the PlayStation 2 videogame console will taper off this fiscal year.

The Tokyo electronics and entertainment giant said Thursday that profits rose to 115.5 billion yen ($963 million) for the fiscal year ended March 31 from 15.3 billion yen a year earlier. Sales edged down to 7.47 trillion yen ($62 billion) from 7.58 trillion yen.

Its electronics business was profitable in contrast to a loss a year ago despite lower sales. Its music business had an operating loss.

But the yen's decline, which helps boost the value of overseas earnings for exporters like Sony, helped the results, the company said.

To maintain its competitive edge, Sony will strengthen its core electronics business by investing 500 billion yen ($4 billion) over the next three years in computer chips and devices for camcorders and other gadgets producing digital images, where Sony foresees growth, as well as for broadband network appliances, Idei said in a statement.

Sony also will invest an additional 500 billion yen in research and spend 300 billion yen ($2.5 billion) on restructuring to withdraw from some businesses and reduce costs, he said.

Its powerful entertainment divisions have helped Sony avoid some of the pitfalls of other Japanese manufacturers hammered by the long global electronics slump and the emergence of competition from Asian rivals.

"Spider-Man" was the highest grossing film in company history, exceeding $800 million in worldwide box office receipts. Adding to theater and home entertainment income were other popular movies, including "XXX" and "Mr. Deeds." But the films "I Spy" and "Stuart Little 2" were disappointments.